Fifth Third Announces Second Quarter 2017 Net Income to Common Shareholders of $344 Million, or $0.45 Per Diluted Share

2Q17 net income available to common shareholders of $344 million, or
$0.45 per diluted common share

Results included a negative $0.01 impact on reported 2Q17 earnings per
share resulting from a $9 million pre-tax (~$6 million after-tax)
(a) charge related to the valuation of the Visa total return swap

Reported net interest income of $939 million; taxable equivalent net
interest income of $945 million(b), up 1% from 1Q17 and up
4% from 2Q16; excluding the 1Q17 card remediation impact, up 2% from
1Q17(b)

Book value per share of $20.42 up 1% from 1Q17 and up 2% from 2Q16;
tangible book value per share(b) of $17.11 up 1% from both
1Q17 and 2Q16

CINCINNATI--(BUSINESS WIRE)--Jul. 21, 2017--
Fifth Third Bancorp (Nasdaq:FITB) today reported second quarter 2017 net
income of $367 million versus net income of $305 million in the first
quarter of 2017 and $328 million in the second quarter of 2016. After
preferred dividends, net income available to common shareholders was
$344 million, or $0.45 per diluted share, in the second quarter of 2017,
compared with $290 million, or $0.38 per diluted share, in the first
quarter of 2017, and $305 million, or $0.39 per diluted share, in the
second quarter of 2016.

Second quarter 2017 included:

Income

($9 million) charge related to the valuation of the Visa total return
swap

First quarter 2017 included:

Income

$12 million benefit related to the revision to the 4Q16 estimated
charge to net interest income for refunds to certain bankcard customers

($13 million) charge related to the valuation of the Visa total return
swap

Second quarter 2016 included:

Income

$19 million positive valuation adjustment on the Vantiv warrant

$11 million gain on sale of Pennsylvania branches as part of the
previously announced branch consolidation and sales plan

$11 million gain on the sale of the non-strategic agented bankcard
loan portfolio

($50 million) charge related to the valuation of the Visa total return
swap, primarily reflecting the rejection of the merchant litigation
settlement

Expenses

($9 million) in compensation-related expenses due to retirement
eligibility changes

Earnings Highlights

For the Three Months Ended

% Change

June

March

December

September

June

2017

2017

2016

2016(d)

2016(d)

Seq

Yr/Yr

Earnings ($ in millions)

Net income attributable to Bancorp

$367

$305

$395

$516

$328

20%

12%

Net income available to common shareholders

$344

$290

$372

$501

$305

19%

13%

Common Share Data

Earnings per share, basic

$0.46

$0.38

$0.49

$0.66

$0.40

21%

15%

Earnings per share, diluted

0.45

0.38

0.49

0.65

0.39

18%

15%

Cash dividends per common share

0.14

0.14

0.14

0.13

0.13

-

8%

Common shares outstanding (in thousands)

738,873

750,145

750,479

755,582

766,346

(2%)

(4%)

Average common shares outstanding

(in thousands):

Basic

741,401

747,668

746,367

750,886

759,105

(1%)

(2%)

Diluted

752,328

760,809

757,704

757,856

764,811

(1%)

(2%)

Financial Ratios

bps Change

Return on average assets

1.05

%

0.88

%

1.11

%

1.44

%

0.92

%

17

13

Return on average common equity

9.0

7.8

9.7

12.8

8.0

120

100

Return on average tangible common equity(b)

10.7

9.3

11.6

15.2

9.6

140

110

CET1 capital(c)

10.63

10.76

10.39

10.17

9.94

(13)

69

Tier I risk-based capital(c)

11.76

11.90

11.50

11.27

11.03

(14)

73

CET1 capital (fully-phased in)(b)(c)

10.52

10.66

10.29

10.09

9.86

(14)

66

Net interest margin (taxable equivalent)(b)

3.01

3.02

2.86

2.88

2.88

(1)

13

Efficiency (taxable equivalent)(b)

63.4

67.4

62.8

55.5

65.3

(400)

(190)

“The strength of our second quarter performance reflects our continued
discipline with respect to expenses, credit quality, and balance sheet
management. We are very encouraged by the improvement in all of our
return metrics including our ROA and ROTCE both sequentially as well as
year over year,” said Greg D. Carmichael, President and CEO of Fifth
Third Bancorp.

“The recently announced CCAR results provide further proof of our
commitment to our shareholders. Over the next four quarters we expect to
return a significant amount of capital to our shareholders based on our
strong capital position, the improved risk profile of our balance sheet
and our strong internal capital generation capacity. As previously
announced, we expect to do so through dividend increases along with a
sizeable increase in capital deployed for share repurchases.”

Income Statement Highlights

($ in millions, except per-share data)

For the Three Months Ended

% Change

June

March

December

September

June

2017

2017

2016

2016(d)

2016(d)

Seq

Yr/Yr

Condensed Statements of Income

Net interest income (taxable equivalent)(b)

$945

$939

$909

$913

$908

1%

4%

Provision for loan and lease losses

52

74

54

80

91

(30%)

(43%)

Total noninterest income

564

523

620

840

599

8%

(6%)

Total noninterest expense

957

986

960

973

983

(3%)

(3%)

Income before income taxes (taxable equivalent)(b)

$500

$402

$515

$700

$433

24%

15%

Taxable equivalent adjustment

6

6

6

6

6

-

-

Applicable income tax expense

127

91

114

178

103

40%

23%

Net income

$367

$305

$395

$516

$324

20%

13%

Less: Net income attributable to noncontrolling interests

-

-

-

-

(4)

-

(100%)

Net income attributable to Bancorp

$367

$305

$395

$516

$328

20%

12%

Dividends on preferred stock

23

15

23

15

23

53%

-

Net income available to common shareholders

$344

$290

$372

$501

$305

19%

13%

Earnings per share, diluted

$0.45

$0.38

$0.49

$0.65

$0.39

18%

15%

Net Interest Income

(Taxable equivalent basis; $ in millions)(b)

For the Three Months Ended

% Change

June

March

December

September

June

2017

2017

2016

2016

2016

Seq

Yr/Yr

Interest Income

Total interest income

$1,112

$1,092

$1,058

$1,063

$1,052

2%

6%

Total interest expense

167

153

149

150

144

9%

16%

Net interest income

$945

$939

$909

$913

$908

1%

4%

Average Yield

bps Change

Yield on interest-earning assets

3.54%

3.51%

3.33%

3.36%

3.34%

3

20

Rate paid on interest-bearing liabilities

0.79%

0.73%

0.70%

0.70%

0.67%

6

12

Net interest rate spread

2.75%

2.78%

2.63%

2.66%

2.67%

(3)

8

Net interest margin

3.01%

3.02%

2.86%

2.88%

2.88%

(1)

13

Average Balances

% Change

Loans and leases, including held for sale

$92,653

$92,791

$93,981

$94,417

$94,807

-

(2%)

Total securities and other short-term investments

33,481

33,177

32,567

31,675

32,040

1%

4%

Total interest-earning assets

126,134

125,968

126,548

126,092

126,847

-

(1%)

Total interest-bearing liabilities

85,320

84,890

84,552

85,193

86,145

1%

(1%)

Bancorp shareholders' equity(d)

16,615

16,429

16,545

16,883

16,584

1%

-

Net interest income for the first quarter of 2017 included the $12
million reversal of a previously-estimated charge for refunds to certain
bankcard customers. Excluding the impact of this item, taxable
equivalent net interest income in the second quarter of 2017 was up $18
million sequentially, reflecting the impact of higher short-term market
rates during the quarter and a higher day count. The taxable equivalent
net interest margin was 3.01 percent, up 3 bps from the prior quarter’s
adjusted net interest margin, primarily driven by higher short-term
market rates, partially offset by a higher day count.

Compared to the second quarter of 2016, taxable equivalent net interest
income was up 4 percent, primarily driven by higher short-term market
rates. The net interest margin was up 13 bps from the second quarter of
2016, also primarily driven by higher short-term market rates.

Securities

Average securities and other short-term investments were $33.5 billion
in the second quarter of 2017 compared to $33.2 billion in the previous
quarter and $32.0 billion in the second quarter of 2016. Average other
short-term investments were stable sequentially at $1.3 billion.

Loans

($ in millions)

For the Three Months Ended

% Change

June

March

December

September

June

2017

2017

2016

2016

2016

Seq

Yr/Yr

Average Portfolio Loans and Leases

Commercial:

Commercial and industrial loans

$41,601

$41,854

$42,548

$43,116

$43,876

(1%)

(5%)

Commercial mortgage loans

6,845

6,941

6,957

6,888

6,831

(1%)

-

Commercial construction loans

4,306

3,987

3,890

3,848

3,551

8%

21%

Commercial leases

4,036

3,901

3,921

3,962

3,898

3%

4%

Total commercial loans and leases

$56,788

$56,683

$57,316

$57,814

$58,156

-

(2%)

Consumer:

Residential mortgage loans

$15,417

$15,200

$14,854

$14,455

$14,046

1%

10%

Home equity

7,385

7,581

7,779

7,918

8,054

(3%)

(8%)

Automobile loans

9,410

9,786

10,162

10,508

10,887

(4%)

(14%)

Credit card

2,080

2,141

2,180

2,165

2,134

(3%)

(3%)

Other consumer loans and leases

892

755

673

651

654

18%

36%

Total consumer loans and leases

$35,184

$35,463

$35,648

$35,697

$35,775

(1%)

(2%)

Total average portfolio loans and leases

$91,972

$92,146

$92,964

$93,511

$93,931

-

(2%)

Average loans held for sale

$681

$645

$1,017

$906

$876

6%

(22%)

Average portfolio loan and lease balances were flat sequentially and
decreased $2.0 billion, or 2 percent, from the second quarter of 2016.
The year-over-year decrease was primarily driven by declines in
commercial and industrial (C&I) and automobile loans. The year-over-year
decline in C&I loans was primarily due to deliberate exits from certain
C&I loans that did not meet risk-adjusted profitability targets. The
year-over-year decline in automobile loans continues to reflect our
decision to reduce lower-return originations to improve returns on
capital. Period end portfolio loans and leases of $91.4 billion, were
also flat sequentially, and decreased $2.5 billion, or 3 percent, from a
year ago. On a year-over-year basis, the decrease in period end loan
balances was primarily due to declines in C&I and automobile loans,
partially offset by increases in residential mortgage and commercial
construction loans.

Average commercial portfolio loan and lease balances were flat
sequentially, and decreased $1.4 billion, or 2 percent, from the second
quarter of 2016. Average C&I loans decreased $253 million, or 1 percent,
from the prior quarter and decreased $2.3 billion, or 5 percent, from
the second quarter of 2016. The decline in C&I loans was primarily due
to the aforementioned deliberate exits. Average commercial real estate
loans increased $223 million, or 2 percent, from the prior quarter and
increased $769 million, or 7 percent, from the second quarter of 2016.
Within commercial real estate, average commercial mortgage balances
decreased $96 million and average commercial construction balances
increased $319 million sequentially. Period end commercial line
utilization of 34 percent was flat from the first quarter of 2017 and
decreased 1 percent from the second quarter of 2016.

Average consumer portfolio loan and lease balances decreased $279
million, or 1 percent, sequentially and decreased $591 million, or 2
percent, from the second quarter of 2016. This was primarily driven by
average automobile loans which decreased 4 percent sequentially and 14
percent from a year ago. Average residential mortgage loans increased 1
percent sequentially and 10 percent from the previous year. Average home
equity loans decreased 3 percent sequentially and 8 percent from the
second quarter of 2016. Average credit card loans decreased 3 percent
sequentially and from the second quarter of 2016.

Average total commercial transaction deposits of $42 billion decreased 5
percent sequentially and 4 percent from the second quarter of 2016.
Average total consumer transaction deposits of $54 billion increased 2
percent sequentially and increased 5 percent from the second quarter of
2016.

Wholesale Funding

($ in millions)

For the Three Months Ended

% Change

June

March

December

September

June

2017

2017

2016

2016

2016

Seq

Yr/Yr

Average Wholesale Funding

Certificates - $100,000 and over

$2,623

$2,579

$2,539

$2,768

$2,819

2%

(7%)

Other deposits

264

162

115

749

467

63%

(43%)

Federal funds purchased

311

639

280

446

693

(51%)

(55%)

Other short-term borrowings

4,194

1,893

1,908

2,171

3,754

NM

12%

Long-term debt

13,273

13,856

15,173

16,102

15,351

(4%)

(14%)

Total average wholesale funding

$20,665

$19,129

$20,015

$22,236

$23,084

8%

(10%)

Average wholesale funding of $20.7 billion increased $1.5 billion, or 8
percent, sequentially and decreased $2.4 billion, or 10 percent,
compared with the second quarter of 2016. The sequential increase in
average wholesale funding was primarily driven by an increase in
short-term borrowings to offset a decline in core deposits. The
year-over-year decrease in wholesale funding was primarily driven by
lower long-term debt balances in response to declining asset balances.

Noninterest Income

($ in millions)

For the Three Months Ended

% Change

June

March

December

September

June

2017

2017

2016

2016

2016

Seq

Yr/Yr

Noninterest Income

Service charges on deposits

$139

$138

$141

$143

$138

1%

1%

Corporate banking revenue

101

74

101

111

117

36%

(14%)

Mortgage banking net revenue

55

52

65

66

75

6%

(27%)

Wealth and asset management revenue

103

108

100

101

101

(5%)

2%

Card and processing revenue

79

74

79

79

82

7%

(4%)

Other noninterest income

85

77

137

336

80

10%

6%

Securities gains (losses), net

-

-

(3)

4

6

-

(100%)

Securities gains, net - non-qualifying

hedges on mortgage servicing rights

2

-

-

-

-

100%

100%

Total noninterest income

$564

$523

$620

$840

$599

8%

(6%)

Noninterest income of $564 million increased $41 million sequentially
and decreased $35 million compared with prior year results. The
sequential and year-over-year comparisons reflect the impacts described
below.

Noninterest Income excluding certain items

($ in millions)

For the Three Months Ended

% Change

June

March

June

2017

2017

2016

Seq

Yr/Yr

Noninterest Income excluding certain items

Noninterest income (U.S. GAAP)

$564

$523

$599

Valuation of Visa total return swap

9

13

50

Vantiv warrant valuation

-

-

(19)

Gain on sale of certain branches

-

-

(11)

Gain on sale of the non-strategic agented bankcard loan portfolio

-

-

(11)

Securities (gains) / losses

-

-

(6)

Securities gains, net - non-qualifying

hedges on mortgage servicing rights

(2)

-

-

Noninterest income excluding certain items(b)

$571

$536

$602

7%

(5%)

Excluding the items in the table above, noninterest income of $571
million increased $35 million, or 7 percent, from the previous quarter
and decreased $31 million, or 5 percent, from the second quarter of
2016. The sequential increase was primarily due to increases in
corporate banking revenue and other noninterest income, partially offset
by a decrease in wealth and asset management revenue from the seasonally
strong first quarter of 2017. The year-over-year decrease was driven by
declines in mortgage banking net revenue and corporate banking revenue.

Corporate banking revenue of $101 million increased 36 percent
sequentially and decreased 14 percent from the second quarter of 2016.
The sequential increase reflected a $31 million lease remarketing
impairment related to an oilfield services exposure in the first quarter
of 2017. Excluding this impairment, corporate banking revenue decreased
4 percent sequentially, primarily driven by a decline in institutional
sales revenue and foreign exchange revenue, partially offset by
increases in other corporate banking revenue. The year-over-year
decrease was primarily driven by a decline in foreign exchange fees and
loan syndication revenue, partially offset by an increase in lease
remarketing fees.

Mortgage banking net revenue was $55 million in the second quarter of
2017, up $3 million from the first quarter of 2017 and down $20 million
from the second quarter of 2016. Originations of $2.3 billion in the
current quarter increased 17 percent sequentially and decreased 16
percent from the second quarter of 2016. Second quarter 2017
originations resulted in $37 million of origination fees and gains on
loan sales, compared with $29 million during the previous quarter and
$54 million during the second quarter of 2016. Net mortgage servicing
revenue (which consists of gross mortgage servicing fees, MSR
decay/amortization, net valuation adjustments on MSRs and mark-to-market
adjustments on free-standing off-balance sheet derivatives used to
economically hedge the MSR portfolio) was $18 million this quarter, $23
million in the first quarter of 2017, and $21 million in the second
quarter of 2016. Gross mortgage servicing fees were $49 million this
quarter, $47 million in the first quarter of 2017, and $50 million in
the second quarter of 2016. MSR decay/amortization was $30 million this
quarter, $27 million in the first quarter of 2017, and $35 million in
the second quarter of 2016. Net servicing asset valuation adjustments
resulted in a negative $1 million impact in the second quarter of 2017,
positive $3 million in the first quarter of 2017, and positive $6
million in the second quarter of 2016.

Wealth and asset management revenue of $103 million decreased 5 percent
from the first quarter of 2017 and increased 2 percent from the second
quarter of 2016. The sequential decrease was primarily driven by
seasonally lower tax-related private client services revenue, partially
offset by higher personal asset management revenue. The year-over-year
increase was primarily driven by higher personal asset management and
brokerage revenue.

Card and processing revenue of $79 million in the second quarter of 2017
increased 7 percent sequentially and decreased 4 percent from the second
quarter of 2016. The sequential increase reflected an increase in
customer transactions and spend volume. The year-over-year decrease was
impacted by higher rewards in the second quarter of 2017.

Other noninterest income totaled $85 million in the second quarter of
2017, compared with $77 million in the previous quarter and $80 million
in the second quarter of 2016. The reported results included the
valuation of the Visa total return swap, Vantiv-related adjustments, and
other items as shown in the table on page 9. For the second quarter of
2017, excluding these items, other noninterest income of $94 million
increased approximately $4 million, or 4 percent, from the first quarter
of 2017 and increased $5 million, or 6 percent, from the second quarter
of 2016.

Net gains/losses on investment securities were immaterial in the second
quarter of 2017 and first quarter of 2017, compared with a $6 million
net gain in the second quarter of 2016. Net gains on securities held as
non-qualifying hedges for the MSR portfolio were $2 million in the
second quarter of 2017.

Noninterest Expense

($ in millions)

For the Three Months Ended

% Change

June

March

December

September

June

2017

2017

2016

2016

2016

Seq

Yr/Yr

Noninterest Expense

Salaries, wages and incentives

$397

$411

$403

$400

$407

(3%)

(2%)

Employee benefits

86

111

76

78

85

(23%)

1%

Net occupancy expense

70

78

73

73

75

(10%)

(7%)

Technology and communications

57

58

56

62

60

(2%)

(5%)

Equipment expense

29

28

29

29

30

4%

(3%)

Card and processing expense

33

30

31

30

37

10%

(11%)

Other noninterest expense

285

270

292

301

289

6%

(1%)

Total noninterest expense

$957

$986

$960

$973

$983

(3%)

(3%)

Noninterest expense of $957 million decreased $29 million, or 3 percent,
compared with the first quarter of 2017 and decreased $26 million, or 3
percent, compared with the second quarter of 2016. The sequential
decrease was driven by lower compensation-related expenses, primarily
attributed to lower long-term incentive compensation expense and
seasonally lower FICA expense, as well as lower occupancy expense. The
sequential improvement was partially offset by higher other noninterest
expense, primarily due to higher marketing expense associated with the
new brand campaign. The year-over-year decrease was driven by lower
compensation-related expenses, lower occupancy expense, and lower card
and processing expense predominantly due to contract renegotiations. As
previously disclosed, both the sequential and year-over-year comparisons
were impacted by $18 million in long-term incentive compensation expense
recognized in the first quarter of 2017 that would have otherwise been
recognized in the second quarter. This was due to a change in the grant
date for employee share-based compensation.

Credit Quality

($ in millions)

For the Three Months Ended

June

March

December

September

June

2017

2017

2016

2016

2016

Total net losses charged-off

Commercial and industrial loans

($18)

($36)

($25)

($61)

($39)

Commercial mortgage loans

(5)

(5)

(2)

(2)

(6)

Commercial construction loans

-

-

-

-

-

Commercial leases

(1)

(1)

(1)

-

(1)

Residential mortgage loans

(2)

(5)

(2)

(2)

(2)

Home equity

(5)

(6)

(6)

(7)

(6)

Automobile loans

(6)

(11)

(11)

(9)

(8)

Credit card

(22)

(22)

(19)

(20)

(21)

Other consumer loans and leases

(5)

(3)

(7)

(6)

(4)

Total net losses charged-off

($64)

($89)

($73)

($107)

($87)

Total losses charged-off

($95)

($107)

($97)

($137)

($105)

Total recoveries of losses previously charged-off

31

18

24

30

18

Total net losses charged-off

($64)

($89)

($73)

($107)

($87)

Ratios (annualized)

Net losses charged-off as a percent of average portfolio loans and

leases (excluding held for sale)

0.28%

0.40%

0.31%

0.45%

0.37%

Commercial

0.17%

0.29%

0.20%

0.43%

0.32%

Consumer

0.46%

0.56%

0.49%

0.49%

0.45%

Net charge-offs were $64 million, or 28 bps of average portfolio loans
and leases on an annualized basis, in the second quarter of 2017
compared with net charge-offs of $89 million, or 40 bps, in the first
quarter of 2017 and $87 million, or 37 bps, in the second quarter of
2016.

Consumer net charge-offs of $40 million, or 46 bps, decreased $7 million
sequentially. Compared with the previous quarter, net charge-offs on
residential mortgage loans decreased $3 million. Net charge-offs on the
home equity portfolio decreased $1 million from the previous quarter.
Net charge-offs on the auto portfolio decreased $5 million from the
previous quarter. Net charge-offs on credit card loans were flat from
the first quarter of 2017. Net charge-offs on other consumer loans
increased $2 million sequentially.

($ in millions)

For the Three Months Ended

June

March

December

September

June

2017

2017

2016

2016

2016

Allowance for Credit Losses

Allowance for loan and lease losses, beginning

$1,238

$1,253

$1,272

$1,299

$1,295

Total net losses charged-off

(64)

(89)

(73)

(107)

(87)

Provision for loan and lease losses

52

74

54

80

91

Allowance for loan and lease losses, ending

$1,226

$1,238

$1,253

$1,272

$1,299

Reserve for unfunded commitments, beginning

$159

$161

$162

$151

$144

Provision for unfunded commitments

3

(2)

(1)

11

7

Reserve for unfunded commitments, ending

$162

$159

$161

$162

$151

Components of allowance for credit losses:

Allowance for loan and lease losses

$1,226

$1,238

$1,253

$1,272

$1,299

Reserve for unfunded commitments

162

159

161

162

151

Total allowance for credit losses

$1,388

$1,397

$1,414

$1,434

$1,450

Allowance for loan and lease losses ratio

As a percent of portfolio loans and leases

1.34%

1.35%

1.36%

1.37%

1.38%

As a percent of nonperforming loans and leases(f)

200%

188%

190%

212%

188%

As a percent of nonperforming assets(f)

185%

172%

170%

182%

161%

Provision for loan and lease losses totaled $52 million in the second
quarter of 2017. As of quarter end the allowance represented 1.34
percent of total portfolio loans and leases outstanding as of quarter
end, compared with 1.35 percent last quarter, and represented 200
percent of nonperforming loans and leases, and 185 percent of
nonperforming assets.

Provision for loan and lease losses decreased $22 million from the first
quarter of 2017 and $39 million from the second quarter of 2016,
primarily driven by improving criticized assets and nonperforming loans.
The allowance for loan and lease losses decreased $12 million
sequentially.

Total nonperforming portfolio assets decreased $59 million, or 8
percent, from the previous quarter to $662 million. Portfolio
nonperforming loans (NPLs) at quarter-end decreased $43 million from the
previous quarter to $614 million, or 0.67 percent of total portfolio
loans, leases and OREO.

Commercial portfolio NPLs decreased $38 million from last quarter to
$485 million, or 0.86 percent of commercial portfolio loans, leases and
OREO. Consumer portfolio NPLs decreased $5 million from last quarter to
$129 million, or 0.37 percent of consumer portfolio loans, leases and
OREO.

OREO balances decreased $13 million from the prior quarter to $37
million, and included $23 million in commercial OREO and $14 million in
consumer OREO. Repossessed personal property decreased $3 million from
the prior quarter to $11 million.

Loans over 90 days past due and still accruing were flat from the first
quarter of 2017 at $75 million. Loans 30-89 days past due of $190
million increased $10 million from the previous quarter.

Capital and Liquidity Position

For the Three Months Ended

June

March

December

September

June

2017

2017

2016

2016

2016

Capital Position

Average total Bancorp shareholders' equity to average assets

11.84%

11.72%

11.66%

11.83%

11.60%

Tangible equity(b)

9.98%

10.12%

9.82%

9.73%

9.59%

Tangible common equity (excluding unrealized gains/losses)(b)

9.02%

9.15%

8.87%

8.78%

8.64%

Tangible common equity (including unrealized gains/losses)(b)

9.12%

9.20%

8.91%

9.24%

9.18%

Regulatory capital ratios:

CET1 capital(c)

10.63%

10.76%

10.39%

10.17%

9.94%

Tier I risk-based capital(c)

11.76%

11.90%

11.50%

11.27%

11.03%

Total risk-based capital(c)

15.22%

15.45%

15.02%

14.88%

14.66%

Tier I leverage

10.07%

10.15%

9.90%

9.80%

9.64%

CET1 capital (fully phased-in)(b)(c)

10.52%

10.66%

10.29%

10.09%

9.86%

Book value per share

$20.42

$20.13

$19.82

$20.44

$20.09

Tangible book value per share(b)

$17.11

$16.89

$16.60

$17.22

$16.93

Modified liquidity coverage ratio (LCR)(h)

122%

119%

128%

115%

110%

Capital ratios remained strong during the quarter. The CET1 ratio was
10.63 percent, the tangible common equity to tangible assets ratio(b)
was 9.02 percent (excluding unrealized gains/losses), and 9.12 percent
(including unrealized gains/losses). The Tier I risk-based capital ratio
was 11.76 percent, the Total risk-based capital ratio was 15.22 percent,
and the Tier I leverage ratio was 10.07 percent.

Book value per share at June 30, 2017 was $20.42 and tangible book value
per share(b) was $17.11, compared with the March 31, 2017
book value per share of $20.13 and tangible book value per share(b)
of $16.89.

On May 1, 2017, Fifth Third initially settled a share repurchase
agreement whereby Fifth Third would purchase $342 million of its
outstanding stock. This reduced second quarter common shares outstanding
by 11.6 million shares. Settlement of the forward contract related to
this agreement is expected to occur on or before July 26, 2017.

On June 28, 2017, Fifth Third announced that the Board of Governors of
the Federal Reserve System did not object to Fifth Third’s 2017 CCAR
capital plan for the period beginning July 1, 2017 and ending June 30,
2018. Fifth Third’s capital plan included the following capital actions
related to common dividends and share repurchases:

The increase in the quarterly common stock dividend to $0.16 from
$0.14 beginning 3Q 2017 and to $0.18 beginning 2Q 2018, a 29 percent
increase over the current dividend rate

The repurchase of common shares in an amount up to $1.161 billion, or
a 76 percent increase over the 2016 capital plan. These repurchases
include:

$88 million in repurchases related to share issuances under
employee benefit plans

The additional ability to repurchase common shares in the amount of
any after-tax capital generated from the sale of Vantiv, Inc.
(“Vantiv”) common stock

The additional ability to repurchase common shares in the amount of
any after-tax cash income generated from the termination and
settlement of gross cash flows from existing TRAs with Vantiv or
potential future TRAs that may be generated from additional sales of
Vantiv

Tax Rate

The effective tax rate was 25.9 percent in the second quarter of 2017
compared with 22.9 percent in the first quarter of 2017 and 23.9 percent
in the second quarter of 2016.

Other

Fifth Third Bank owns approximately 35 million units representing a 17.7
percent interest in Vantiv Holding, LLC, convertible into shares of
Vantiv, Inc., a publicly traded firm. Based upon Vantiv’s closing price
of $63.34 on June 30, 2017, our interest in Vantiv was valued at
approximately $2.2 billion. Next month in our 10-Q, we will update our
disclosure of the carrying value of our interest in Vantiv stock, which
was $430 million as of March 31, 2017. The difference between the market
value and the book value of Fifth Third’s interest in Vantiv’s shares is
not recognized in Fifth Third’s equity or capital.

Conference Call

Fifth Third will host a conference call to discuss these financial
results at 10:00 a.m. (Eastern Time) today. This conference call will be
webcast live and may be accessed through the Fifth Third Investor
Relations website at www.53.com
(click on “About Us” then “Investor Relations”).

Those unable to listen to the live webcast may access a webcast replay
through the Fifth Third Investor Relations website at the same web
address. Additionally, a telephone replay of the conference call will be
available after the conference call until approximately August 4, 2017
by dialing 800-585-8367 for domestic access or 404-537-3406 for
international access (passcode 44812729#).

Corporate Profile

Fifth Third Bancorp is a diversified financial services company
headquartered in Cincinnati, Ohio. As of June 30, 2017, the Company had
$141 billion in assets and operates 1,157 full-service Banking Centers,
and 2,461 Fifth Third branded ATMs in Ohio, Kentucky, Indiana, Michigan,
Illinois, Florida, Tennessee, West Virginia, Georgia and North Carolina.
In total, Fifth Third provides its customers with access to more than
45,000 fee-free ATMs across the United States. Fifth Third operates four
main businesses: Commercial Banking, Branch Banking, Consumer Lending,
and Wealth & Asset Management. Fifth Third also has a 17.7% interest in
Vantiv Holding, LLC. Fifth Third is among the largest money managers in
the Midwest and, as of June 30, 2017, had $330 billion in assets under
care, of which it managed $34 billion for individuals, corporations and
not-for-profit organizations through its Trust and Registered Investment
Advisory businesses. Investor
information and press
releases can be viewed at www.53.com.
Fifth Third’s common stock is traded on the NASDAQ® Global Select Market
under the symbol “FITB.”

Under the banking agencies' Basel III Final Rule, assets and credit
equivalent amounts of off-balance sheet exposures are calculated
according to the standardized approach for risk-weighted assets. The
resulting values are added together resulting in the Bancorp's total
risk-weighted assets used in the calculation of the tier I
risk-based capital and common equity tier 1 ratios. Current period
regulatory capital ratios are estimated.

(d)

Net tax deficiencies of $5 million and $0 were reclassified from
capital surplus to applicable income tax expense and average common
shares outstanding – diluted were adjusted at June 30, 2016 and
September 30, 2016, respectively, related to the early adoption of
ASU 2016-09 during the fourth quarter of 2016, with an effective
date of January 1, 2016.

(e)

Includes commercial customer Eurodollar sweep balances for which the
Bancorp pays rates comparable to other commercial deposit accounts.

(f)

Excludes nonaccrual loans in loans held for sale.

(g)

As of June 30, 2017, March 31, 2017 and December 31, 2016, excludes
$7 million of restructured accruing loans and $19 million of
restructured nonaccrual loans associated with a consolidated VIE in
which the Bancorp has no continuing credit risk due to the risk
being assumed by a third party. As of September 30, 2016, and June
30, 2016, excludes $7 million of restructured accruing loans and $20
million of restructured nonaccrual loans associated with a
consolidated VIE in which the Bancorp has no continuing credit risk
due to the risk being assumed by a third party.

(h)

The Bancorp became subject to the Modified LCR regulations effective
January 1, 2016. (Current period LCR is estimated)

FORWARD-LOOKING STATEMENTS

This release contains statements that we believe are “forward-looking
statements” within the meaning of Section 27A of the Securities Act of
1933, as amended, and Rule 175 promulgated thereunder, and Section 21E
of the Securities Exchange Act of 1934, as amended, and Rule 3b-6
promulgated thereunder. These statements relate to our financial
condition, results of operations, plans, objectives, future performance
or business. They usually can be identified by the use of
forward-looking language such as “will likely result,” “may,” “are
expected to,” “anticipates,” “potential,” “estimate,” “forecast,”
“projected,” “intends to,” or may include other similar words or phrases
such as “believes,” “plans,” “trend,” “objective,” “continue,” “remain,”
or similar expressions, or future or conditional verbs such as “will,”
“would,” “should,” “could,” “might,” “can,” or similar verbs. You should
not place undue reliance on these statements, as they are subject to
risks and uncertainties, including but not limited to the risk factors
set forth in our most recent Annual Report on Form 10-K as updated from
time to time by our Quarterly Reports on Form 10-Q. When considering
these forward-looking statements, you should keep in mind these risks
and uncertainties, as well as any cautionary statements we may make.
Moreover, you should treat these statements as speaking only as of the
date they are made and based only on information then actually known to
us. There is a risk that additional information may become known during
the company’s quarterly closing process or as a result of subsequent
events that could affect the accuracy of the statements and financial
information contained herein.

There are a number of important factors that could cause future
results to differ materially from historical performance and these
forward-looking statements. Factors that might cause such a difference
include, but are not limited to: (1) general economic or real estate
market conditions, either nationally or in the states in which Fifth
Third, one or more acquired entities and/or the combined company do
business, weaken or are less favorable than expected; (2) deteriorating
credit quality; (3) political developments, wars or other hostilities
may disrupt or increase volatility in securities markets or other
economic conditions; (4) changes in the interest rate environment reduce
interest margins; (5) prepayment speeds, loan origination and sale
volumes, charge-offs and loan loss provisions; (6) Fifth Third’s ability
to maintain required capital levels and adequate sources of funding and
liquidity; (7) maintaining capital requirements and adequate sources of
funding and liquidity may limit Fifth Third’s operations and potential
growth; (8) changes and trends in capital markets; (9) problems
encountered by larger or similar financial institutions may adversely
affect the banking industry and/or Fifth Third; (10) competitive
pressures among depository institutions increase significantly; (11)
changes in customer preferences or information technology systems; (12)
effects of critical accounting policies and judgments; (13) changes in
accounting policies or procedures as may be required by the Financial
Accounting Standards Board (FASB) or other regulatory agencies; (14)
legislative or regulatory changes or actions, or significant litigation,
adversely affect Fifth Third, one or more acquired entities and/or the
combined company or the businesses in which Fifth Third, one or more
acquired entities and/or the combined company are engaged, including the
Dodd-Frank Wall Street Reform and Consumer Protection Act; (15) ability
to maintain favorable ratings from rating agencies; (16) failure of
models or risk management systems or controls; (17) fluctuation of Fifth
Third’s stock price; (18) ability to attract and retain key personnel;
(19) ability to receive dividends from its subsidiaries; (20)
potentially dilutive effect of future acquisitions on current
shareholders’ ownership of Fifth Third; (21) declines in the value of
Fifth Third’s goodwill or other intangible assets; (22) effects of
accounting or financial results of one or more acquired entities; (23)
difficulties from Fifth Third’s investment in, relationship with, and
nature of the operations of Vantiv Holding, LLC; (24) loss of income
from any sale or potential sale of businesses (25) difficulties in
separating the operations of any branches or other assets divested; (26)
losses or adverse impacts on the carrying values of branches and
long-lived assets in connection with their sales or anticipated sales;
(27) inability to achieve expected benefits from branch consolidations
and planned sales within desired timeframes, if at all; (28) ability to
secure confidential information and deliver products and services
through the use of computer systems and telecommunications networks; and
(29) the impact of reputational risk created by these developments on
such matters as business generation and retention, funding and liquidity.

You should refer to our periodic and current reports filed with the
Securities and Exchange Commission, or “SEC,” for further information on
other factors, which could cause actual results to be significantly
different from those expressed or implied by these forward-looking
statements.

In this release, we may sometimes provide non-GAAP financial
information. Please note that although non-GAAP financial measures
provide useful insight to analysts, investors and regulators, they
should not be considered in isolation or relied upon as a substitute for
analysis using GAAP measures. We provide GAAP reconciliations for
non-GAAP measures in a later slide in this presentation as well as in
our earnings release, both of which are available in the investor
relations section of our website, www.53.com.